BOOK REVIEW - "SHOOTING STARS"

SHOOTING STARS BOOK---SET TO BLAST OFF.

Evil has a new name. It's Gershon. Far, Far Away in the Zodiacs, a political and economic common weal of twelve independent constellations, this evil and treacherous maniac is accumulating power. He does so by robbing people of their freedom with lies and sophistry. Then when people and other sentient beings realize they've been duped and turn back to freedom, he, along with his evil minion squash them---destroying, killing, enslaving them in horrible ways.

Upon his rise to power, the last of the Royal Zodian line went into hiding, even sending off for safety their Prince and his Princess from Vega, and their baby daughter, Stella. Together this marriage formed an alliance of the Summer Triangle, but before this freedom-friendly and powerful alliance could take effect, Gershon had already subverted the twelve stewards. The war raged on and Gershon would not give up his devious and insidious plans to destroy the last vestiges of the Royal Family.

Stella is now a young woman, a teenager exactly, who was hidden away and protected from all of this. And, she had a brother, the new Prince, who Gershon knew nothing of. Now alone, without the guidance of their parents, they learn from Maximus, their protector, of their heritage, royal gifts and destiny---if they choose to accept it. One such gift is to travel as SHOOTING STARS. This transport is faster than the speed of light---it is travel at the speed of thought.

Leslie Hodgson, the author of this compelling book, builds on this and winds these two teenagers through their learning trials, has them meet and befriend a stately Winged Horse named Arrow from Pegasus, and Helios, a Dragon from the constellation Draco.

Gershon is not just waiting for them, but is luring them into a trap---to use them for his evil designs or to kill them. Millions will die, and these young people have to grow up fast. As in all ages and in all places the war between tyranny and liberty rages on. The costs are dear. SHOOTING STARS is a page-turning, riveting novel of loss and triumph. You'll feel like you're soaring though the galaxies with Isaac and Stella.

Now available at Amazon.com. Shooting Stars, by Leslie Hodgson

http://www.amazon.com/Shooting-Stars-Leslie-Hodgson/dp/1469931613/ref=sr_1_7?ie=UTF8&qid=1329973909&sr=8-7

Option Pricing and Covered Calls

I want to write in response to one of the blog-site followers, Erin Shabowitsky. She was concerned that there are not too many good covered calls right now. I say yes, especially if you want more than 2% a month cash returns.

Why? The reasons are varied, so let me try to put some perspective. Stocks climb a wall of worry. As the market has moved higher and higher, the premiums are depressed. The fluff is sucked out of the option price. Remember, "when a stock goes up implied volatility goes down (with call options).
Normally we would see an option on BAC at $8 in the .50 cents to .80 cents range. Not now. The $8 calls are about .15 cents and the April options are not much more, say .30 cents. Virtually all the stocks I check are this way.

"FEAR IS PURE AND POTENT, GREED IS ALWAYS TEMPERED WITH REALITY."
There is too much reality out there. It looks like the market wants to move higher, and in many ways (P/E ratios, EPS, even book value) that would be justified, but it also looks like it needs a short to mid-level correction. I bet on that. Reality will set in and it will back off some. At that time option prices will increase. Will they soar? I don't know, that depends on the amount of the downturn or correction.
Just keep your powder dry. Don't spend your capital, be patient.

The Business of America

Hello my friends. I've been very blessed lately. I've had an opportunity to study the Federalists Papers. In the editors preface, he comments on parts of the papers that deal with commerce, wealth and the like. A most profound statement.

His name is Isaac Kramnick, the editor of the 1987 edition of THE FEDERALISTS PAPERS (In their original content and format), said of Alexander Hamilton's quote in #12: "The prosperity of commerce is now perceived and acknowledged by all enlightened statement to be the most useful as well as the most productive source of national wealth . . . By multiplying the means of gratification . . . it seems to vivify and invigorate all the channels of industry and to make them flow with greater activity and copiousness."
The Business of America is Business. When will liberals learn this? And success at this endeavor and all others is freedom. The battle between Tyranny and Freedom is raging on.

Observations on the DOW

I just wanted to make a quick observation. I read recently that the Dow (DJIA, hence the ETF DIA) has not moved up or down more than 100 points a day in about three weeks. I think it's continuing. Look at today. The Dow started down almost 100 points, dropped slightly below that for seconds, and then struggled back all day, closing down 6 points.

If this is the "market at hand," then you can make money. Here's the point. If the DJ futures show down 100 points, and you grab the puts, say the $125s (On the DIA) or the $125 calls if it's showing up that much, then it might be good for a .50 cent profit, or $500.
Even smaller amounts of money will work for a few hundred dollars. I heard Kina got out of her $125  with a $200 profit. Not much, but it's better than a _____________________ (you get creative here).
More Later. Wade
_____________________________________
From the MONEY & POLITICS FILE:
I recently read a great quote from Thomas Jefferson: "I have sworn upon the alter of God, eternal hostility against every form of tyranny over the mind of man."

2012 Part 2

Hi again. I know you've been anxiously waiting my comments on my prognostication for the rest of the year. So here we go. In short, it's stuck. After I wrote the first blog, saying the same thing and commented on the fact that to an extent the market will be political-news driven, I was reading an article/opinion in Investor's Business Daily. It stated: "Look for ups and downs in the polls to have just as much, if not more, influence on this year's market . . ." I couldn't have said it better. I'll repeat my own take on this. The market wants the current president to go back to Hawaii or Chicago or wherever. He has worn out his welcome.

The year 2011 came and left with a whimper. Our market ended about where it started. However, there were some serious gyrations during the year, especially last August. So we were flat. The rest of the world did not fair so well. Germany and France were down 20%. Brazil was down 26% (even after Miss Hillary said we should be more like Brazil). In Asia, Japan was down 16%, India down 40%, Hong Kong down 18%, Taiwan down 25% and the new gorilla in the China Shoppe was China, with it's small public companies down 36%. I say small because their biggest companies are not up to our standards.

So, even the liberal LA Times said it's been a "pretty good year."  Some would say we were in a bear market. If you define a bear market as a reduction in the market of 20% or more, than we were. But hold your horses. Nobody, especially in the Obama-Obsessed-Media will call it that. It all depends when your starting point and ending point is. It depends on your definition of "is." I guess I should join them and blame it on Pres. Bush, but this "recovery" started two full years into this presidency.

Lastly, I'm an eternal optimist. The American economy and Americans in general are too strong and too resilient to even let this Neo-Marxist administration keep us down for long. The IBD said, " . . . the fact that our country is being run by the most anti-business, anti-capitalist, anti-free-market, anti-entreprenuer and anti-Wall Street administration in U.S. history."

This year will plod along. There will be plenty of opportunities to buy good stocks. Plenty of chances to make extra income. And plenty of time to get your own business up and going.
May you prosper well.
Wade

POTENTIAL CASH FLOW DEALS

Hi there my friends.
I haven't forgotten to write the next piece in the comment category about 2012. I'm working on it right now. Well not right right now, but when I finish this blog I'll wrap it up. In fact, I have more than one blog to write. It's not just about the market or the economy, but about how to use this information to make more money. I'll call it "2012 part 2, and then part 3.

POTENTIAL CASH FLOW DEALS.

The market is not heating up. In fact, it's having a devil of a time with 12,400 (The Dow). But there are always trades to be made and profits to be gathered in. Here are some covered call possibilities for Feb. One has a good Jan. premium, so let's get to it.

ROYL: The stock was at $4.65. the Feb. S45 calls were .35 cents to sell. 1,000 shares would be $4,650, so if you sold the $5 calls and actually got called out, you'd make another $350. But you'd take in $350 now for agreeing to sell the stock at $5. It's not 10% but it's not bad. Look at a chart on this company. It has signed a pretty big deal and it's future looks good at this time, albeit things can change.

ELN: I've traded this one off and on for years. The stock is at $13.65, or $13,650 to buy. If you used margin that would be about $6,825. The $13 calls are going for $1.20 to sell. If you did so and got called out, you would adjust your profits by $650 against your gain. Still, you would take in $1,200 dollars for selling 10 contracts at $1.20 each, or $1,200. That would be a net of $550. But take a look at the $14 calls. They going for l65 cents to sell, or $650 now. You get to keep this no matter what. If the stock goes above $14 and you get called out, you'd make another $350 ( $13,650 up to $14,000 = $350). So, take in $650 and potentially make another $350. Pretty good cash flow now, and good potential for more later.

BAC: Look at Bank of America (BAC). The stock is at $6.50. Look at the Jan $6 calls. Yes, these expire next week, Jan. 21st. They are going for .90 cents to sell. That's $900 for you right now. If you get called out you'd have to give back .50 cents, or $500. That's a cool $400 for a week and a few days.
Now, look at the February $6 calls. They're going for $1.00 to sell. That is $1,000 and the same scenario if you get call out. Here's a good look at a choice and the difference it would make. I say, take the money at hand. Sometimes the near-term option is not going for much, so go on out to the next month. However $900 is $900. If the stock goes down, you can buy-back the option for less, keep the stock and then sell the February's then.

There are similar profits to ELN in JDSU. Also look at MU, RMBS, FRO, and even JBLU.
Happy Investing and Trading. Let me know how it goes or if you have any questions.
Your humble autodidact,
Wade

A New Year

Hello my New Year's Friends.
This is going to be a great year---not because of a rampaging bull-market, but because we deal with the market at hand. We take what it gives us and we put market forces to work for us. I've written several thoughts, about the market, the political arena and the economy.

ITEM #1: I still do not think we'll have that rampaging bull market. Many have commented on the fact that it's an election year. This time, I don't agree. Usually the third year of a presidency is the best of the four years. That didn't pan out last year, with the markets closing up or down a fraction of the beginning. I think political news will give short-term direction to the movements in the market. Notice I didn't say that political news and opinions, would drive the market up a big way, or down by big moves. I think, for the most part, it is range bound. I think the Dow (The DJIA 30 stocks), to the extent that it represents the whole market, will trade between 11,600 and 12,800. And those two points are the extremes. If the market goes higher or lower, I think it will be only temporary---or better said, those moves will be outliers. Then it will settle back within those perimeters. In short, it's stuck. I've written before what it will take, and I'll mention it briefly here: We need a repeal of Sarbanes-Oxley---especially Reg. FD, or Regulation Fair Disclosure. What a destructive law. And it would be a great boon to get rid of the new law passed last summer: Dodd-Frank. We have not yet seen the destruction that this law will cause. It's horrible.

I won't wax too political here, but a simple observation. Many people think that the current administration is dangerous for America. I do too. I project that every time news comes out that the Republicans will win the presidency (and to a lesser extent the Senate) the market will go up, almost despite the quarterly news cycle or news out of Europe. Conversely, every time news or polls come out that point to four more years of the current socialist agenda, the market will go down.
I hear and read this sentiment everywhere. It will get more pronounced as we get near election day.

ITEM #2: I was reading an article in Barron's that said, in regards to the market this year, 2012. He said overall that " . . . state of the market, Corporate America, the economy and the world." I think this mirrors my own feelings, in that there is more to a stock price movement, or a whole market movement than just earnings, though I think earnings are vastly important. Read two paragraphs below.
Recently I wrote a blog entitled "Picturesque." I stated that we look at a stock or a company and have to consider the arena of its existence, the whole market, the economy and the whole world, especially the current state of Europe (Which I hope is not our destiny). I will now add one more consideration to the list: It is the product or service of the company. Look at LuluLemon Athletica (LULU). I think the Barron's quotation is right on, but some of the points seem confusing, in that they are redundant. Again, you will not make decisions in a vacuum. You will not invest in a stock that is unaffected by Presidential decisions or liberal policies.

All of these aspects effect earnings and earnings growth. Remember, a stock price today is based on one thing: "A STOCK PRICE TODAY IS BASED ON THE ANTICIPATION OF FUTURE EARNINGS." Do you see how interest rates, a debt crisis, a lawsuit, a new competitor, or a host of other things effect the price of a stock?

I hope to be of service this coming year. I will study and contemplate things and try to help you connect the dots better.
Wade